America Movil is continuing its buying spree by acquiring 51 percent of Salvadorian company CTE, which provides mobile and fixed services in El Salvador, for $417 million. America Movil is buying the stake from France Telecom, which is exiting the Salvadorian and Argentine markets, and other investors.
America Movil said at the end of June CTE had 152,000 wireless subscribers and at the time of closing net debt will not exceed $25 million. The transaction is subject to regulatory approvals and is expected to close during the fourth quarter.
America Movil’s acquisition follows its buy last week of Brazil’s BCP and acquisitions earlier this year also in Brazil, Ecuador and Argentina.
In addition to the El Salvador sale, France Telecom sold its indirect interests in Telecom Argentina to W de Argentina, an affiliate of the Los W group, for $125 million.
France Telecom and Telecom Italia each hold about 34 percent of voting rights and 25.5 percent economic interest in Nortel Inersora, the holding company that owns 54.7 percent of Telecom Argentina. Prior to the sale, France Telecom and Telecom Italia will contribute their stakes in Nortel to a company created for this purpose, co-owned equally by France Telecom and Telecom Italia. France Telecom will then sell 48 percent of this company to W de Argentina with an option to purchase the remaining 2 percent. The option is exercisable between Jan. 31, 2008, and Dec. 31, 2013.
Telecom Argentina owns 100 percent of mobile operator Telecom Personal in Argentina.
France Telecom has been looking to exit the Argentine market for some time to help reduce debt. Telecom Argentina defaulted on its debt payments during the currency crisis in that country last year.
